Irish house prices up nearly 11% in year to February

DUBLIN: Property prices rose by 10.7 per cent in the 12 months to the end of February, according to the latest property price index from the Central Statistics Office (CSO). The year-on-year increase was nearly three percentage points higher than the annual rate of inflation recorded in January and comes on the back of a string of indicators pointing to a pick-up in house prices in the first quarter of 2017. The figures show prices nationally rose by 1.5 per cent in February. In Dublin, where supply pressures are most evident, prices climbed by 8.3 per cent in the year to the end of February.

The Government’s new tax incentive scheme for first-time buyers and a loosening of the Central Bank’s lending rules have been blamed for stimulating demand in the absence of an adequate housing supply. A breakdown of the numbers shows the highest house price growth in the capital was in Dublin City, at 9.2 per cent. In contrast, the lowest growth was in Fingal, with house prices rising just 3.7 per cent. Residential property prices in the rest of State, excluding Dublin, were 13.2 per cent higher in the year to February. The West region showed the greatest price growth, with house prices increasing 19.8 per cent. In contrast, the Mid-East region showed the least price growth, with house prices increasing 9.3 per cent. Despite the increases, the index suggests prices overall are 30.7 per cent off their 2007 peak.

“Ireland’s robust economic recovery was always likely to lead to significant house price rises,” Davy analyst Conall Mac Coille said. “ The key uncertainty is how much extra momentum to Irish house price inflation has been added by the Help-to-Buy scheme and the loosening of the Central Bank mortgage lending rules,” he said.